Background of iPhone:
Model: 3G[S] 32GB
iOS: 3.1.2
Jailbreak: blackra1n
Unlock: blacksn0w (although later I realised I did not need to do this)
Cydia: "Make my life easier"

I tried to update my firmware a while ago to 4.2.1 without success so continued using 3.1.2 with Cydia broken. (Link in trackback).

Just the other day I was happily slicing away at Fruit Ninja, thinking about buying the app when my iPhone froze up after exiting the game.

I restarted the iPhone with the proverbial power/home button combo and started it with blackra1n as per usual. Later on I realised that I couldn't connect to my wireless and nothing was showing up in the available connections even though I know there was some in the vicinity. I thought I would reset the network settings. BAD move, after that the phone rebooted and ever since then has been in a reboot cycle which I can't break.

I would love to be able to get the phone back up and working so I can perform a backup with iTunes.

If worst comes to worst I will cut my losses reluctantly and upgrade the firmware but I have no idea if that is possible.

Unfortunately I acquired my iPhone too late to get the SHSHs for iOS v3.1.2 onto Suarik's server.
The last time I was able to load Cydia before it crashed I was able to see the SHSHs that it had: 3.1.3, 4.0, 4.0.1, 4.0.2, 4.1, 4.2.1+

If you wish to see the back story as to why I didn't upgrade here is the link

Looks like you have shsh blob. You can restore to any of the firmware that has shsh blob for verification.
Run latest version of Tiny Umbrella , on the left pane, you should see your device name ( if you have used TU on this device atleast once when your iphone was bootable, if not then you have to go another long way by retrieving ECID and input it into TU )
Under General Tab, you should see some shsh blob, do a request from Cydia of shsh blob. I am sure you are competent on downloading the blob.
Now Start Tss Server.
Put your iphone into recovery mode and shift + restore to your desired firmware through itunes.

Note : Notice you need unlock, so if you want IOS 4.1 and above, you must restore to custom firmware to preserve your baseband for Ultrasn0w to work. You can find whole bunch of tutorials from Iclarified website.

I downloaded the latest TU.
I have used it before back when iOS v3.1.3 was the latest firmware.
However TU does not show my device name.
Under the "Show All SHSHs" it does show "iPhone3GS 3.1.3 (7E18)-563613900109"
So I guess I'm going to have to retrieve the ECID somehow before I can proceed.

When I originally purchased the phone my sim card was the first it had and Vodafone in New Zealand don't lock their devices I'm guessing that I don't need to unlock. However that said, because I have unlocked when I first got the device thinking I needed to, will I be required to when changing the firmware?

Because I am wanting to keep the baseband (an I'm thinking I should be to keep the ability to jailbreak).
I will be required to make a custom firmware, am I correct in my thinking?
Using something like redsn0w or sn0wbreeze.

I want you to create a custom firmware of 4.1 from snow breeze Hotfile.com: One click file hosting: sn0wbreeze-v2.1.zip
Run redsnow b6 to just put iPhone into pwned dfu mode
Once iPhone is into dfu mode, run iTunes : shift + restore to custom fw of 4.1
When restored you are jailbreak and go to cydia and install ultrasnow to unlock

I went through my iPhone data when I was playing around when the phone was working and found the ECID in hex.
I loaded that into TU and was able to download the SHSH blobs from Cydia.
So yay for that, as it turns out the number at the end of my previously saved 3.1.3 SHSH blob was the ECID in decimial.

Just wondering if there is any way before I upgrade the firmware to access what currently exists on the phone to be able to copy some data out.
I know the storage structure quite well and know where things are.
I have not sync'd my phone with iTunes for some time.
Upgrading the firmware will make me lose photos and phone numbers which is not good. Bad me for not syncing more regularly.

No third party apps would see the iPhone.
I had a further search on google which lead me back here to a post by Mes.
I will give this a shot tonight and see how I get on, if I get the time. ..:: Link ::..